Public Liability Insurance

Abstract

ABSTRACT Festivals in rural communities have their own unique ambience that can powerfully act as a catalyst for community development, stimulate community planning and mobilise communities towards tourism development (Getz & Frisby, 1988; Falassi, 1987; Pyo, 1995; Getz & Cheyne, 2001). Sudden increases in public liability insurance, however, have forced festival organisers to rethink the feasibility of hosting festivals in their communities. The problems currently besetting liability insurance are the result of interrelated factors to do with increasing claims, declining industry profitability and poor risk management practices. Investigations reveal that the cost of claims has been rising for many years. These costs have been driven by personal injury claims and underpriced insurance premiums during most of the 1990s. These trends, exacerbated by the collapse of the insurance giant HIH and the acts of terrorism in the United States on September 11, 2001, have impacted on the rural communities which in many cases, cannot afford to pay the higher insurance premiums. This paper examines the factors that have influenced the current circumstances of festival management in relation to the public liability insurance crisis in Australia. Its purpose is to provide an overview of the current state of the public liability insurance system available to festival organisers in Australia by investigating how the public liability crisis has emerged and to what extent it has impacted on the festival sector, particularly on rural communities that host them. The literature reviewed for this research has been drawn from diverse fields such as law, insurance, risk management, politics, tourism and event management. The research process was undertaken utilising an interpretive paradigm within a grounded theory ontology to explain the extent of the phenomenon. The research was conducted by making qualitative and quantitative analyses of data produced by a questionnaire which was administered via telephone. Discussions with the 82 respondents confirmed that the public liability insurance crisis has had a significant impact on festivals in rural Australia.